Marginal increase in home sales, may not continue

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New home sales crept up by a whisker from February to March, new data shows.

Total new home sales increased by 0.2% in March from February, with a quarterly increase of 5.8%, Housing Industry Association data shows.

HIA economist Diwa Hopkins said it is encouraging to see all of the surveyed states recording increases in detached house sales during the March quarter.

“Strong results occurred in the areas where a new housing recovery is just gaining traction. In the key state of Queensland, detached house sales increased by 20.8% in the March 2014 quarter. South Australia is also showing promising results, with sales up by 6.2%.”

Total seasonally adjusted new home sales increased by nearly six percentage points to be 23.4% higher than 12 months previously. Aggregate detached house sales increased by 7% while multi-unit  sales eased by a marginal 0.2%.

However, the next results may not carry on the same upwards trend, as the number of Australian residential property listings dipped during April, with national stock on market coming to a total of 348,222 – a monthly decrease of 1.2%.

But this may not be too much of a cause for concern, as the nation’s stock levels usually drop during April – however it could be an indication of a cooling market, SQM Research said.

“Although these results are at this stage not significant enough to interpret as a definite halt in what has so far been a booming market during 2014, they serve as an indicator of a potential lull.”

SQM Research managing director Louis Christopher said each Australian city tells a different story.

“I for one am not convinced yet that the boom is over in Sydney. On the other hand, there appears to be ample evidence now that the mining downturn is affecting the Perth and Darwin housing markets.”

Darwin recorded the highest monthly rise in listings of all capital cities, increasing by 2.2% during April to 1,407. Sydney recorded the most substantial monthly decrease in stock levels, falling by 6.5% during April to 22,762.

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